Only 1% of the money invested in startups in 2021 went to teams made up of only women. Wait a minute, 1% (!) of the 100 billion in capital invested in companies by 2021. It is not that the number of businesses started by women entrepreneurs is only 1% of all businesses started, but much higher. Nor is it the case that women are 99% less likely to ask for investment than men. So where does it lie then? And does this provide opportunities to do impact investing? Impact on your assets and impact in society?
Lack of investment in businesses started by women
There are several reasons why there is less investment in companies started by women. Here are the four most important ones:
Diversity on the investor side
Who is sitting across from you when you are looking for investments? These are mainly men, although the number of female investors is growing. But then we are still only talking about 15% of total investors. Why is it actually important to have women investors and to have more diversity on the capital side as well? See the next point.
Recognizing valuable attributes
Everyone has prejudices. Even though you may not think so, it is. This is because you are more likely to recognize the traits you admire in yourself in someone else. Easy, but also tricky. Because so you are never fully objective that way. If someone is similar to you, you experience it as positive. This is why it is important to have female investors/role models because men simply do not recognize all of women’s qualities as such (unconsciously).
Other questions are being asked
Research shows that men are asked different questions than women. While men are asked a lot about opportunities and the future, women are asked more about risks and the past. This gives a whole different dynamic within the conversation. Because what gets you excited; opportunities or risks?
The old boys network
Therefore, if 85% of investors are male, then the network of investors is also largely male. And who else is often in that network? Right, other men. The old boys network is a major reason fewer women are getting funding. The route to funding is often faster and easier for men.
What can you do yourself?
Fortunately, quite a change is underway. Investing already became much more accessible to normal people because of easier investment caps and investment products such as ETFs. Now that the insights and figures on the number of capital going to women entrepreneurs are known, things are moving. There are an increasing number of female investors investing in so-called female founded companies.
More is also possible in this area today and you can invest with impact. There are now several approachable ways to invest in companies – regardless of whether the founders are male or female.
Crowdfunding and Angel investing
The great thing about impact investing in companies is that you really make a difference and are close to the entrepreneurs. You choose the company and team you believe in. Be careful, though, because investing in companies involves a great deal of risk. Especially when a company is still in its early years. To show you what your options are, we have highlighted two examples.
Crowdfunding
There are several companies that raise money through crowdfunding. An easy, approachable way to invest money in a company you believe in. Often you can get in for as little as a small amount and thus help the entrepreneur build the business.
For example, Kim and Kiki of Qommunity are using this way to raise money vo0r building their business. Qommunity is a platform in the Netherlands that helps freelancers find network, knowledge and jobs. this way to raise money to build their business.
They neatly provided an
investmentsheet
drawn up, explain the risks and rewards, and describe their plans for the future. Boarding is then possible from as little as €100.
Angel Investing
Joanna Invests is an initiative of Claire Tange. She wants to make Angel Investing more accessible to women. She introduces women entrepreneurs to her group of Angel Investors and, upon a good match, gets the angels to jointly invest in the venture.
It is similar to crowdfunding, but has just a few more advantages for the entrepreneurs as well as the investors. That also means the entry level is a little higher for investors. Most investments go from €2000.
Investing with impact
Because this is a high-risk way of investing, it is important that you do your own proper research. Whether it’s crowdfunding, Angel Investing or any other method of investing – thorough research is always the first thing you do. Even if it is sometimes small amounts, it is a shame if your money is suddenly gone or makes no return.
Questions you can ask yourself before investing are:
- Do I understand the product and the business model?
- Do I believe in the impact it makes?
- Is the market big enough for a good return?
- Do I have confidence in entrepreneurs?
So do you want to invest with impact by helping women entrepreneurs with their business financing? Then look into angel investing and crowdfunding.
About Qommunity
Qommunity originated as a New Year’s reception, because as a freelancer, you have to take care of that besides your accounting or workplace. By launching the platform in 2020, freelancers from the Netherlands and Belgium are now always connected. Qommunity makes money through memberships, partnerships with brands such as NS and Knab, and matching freelancers to clients. You can now become a co-owner for €100 per share via qommunity.net/funding.
About Joanna Invests
Joanna Invests believes investing is for everyone. The company’s founder, Claire Tange, has extensive experience as CFO at startups (including Fastned and Dott), is an active investor herself and wants to create a more equal and inclusive investment world. To achieve that, low-threshold access to investment opportunities is crucial. In her own words, “Our goal is to both give women entrepreneurs more access to capital and women more capital by introducing them to angel investing.” Joanna Invests’ team focuses on funding young companies founded by women. They are open to any sector, but are most enthusiastic about products and services that make the world a better place. Joanna Invests’ community aims to help startups not only with funding, but also with the expertise of their members. Launched in December 2021, the company made its first investment in We Are Eves, the largest cosmetics platform for honest product reviews in Europe.
